Financial Aspects of Home Ownership Buying a Home Financial Aspects of Home Ownership

Need to know The Homebuying Process Getting a Mortgage Protecting Your Investment Need to know

Appraisal – professional estimate of a property’s market value. Closing – the date and time when the purchase of the house is finalized. Default – failure to repay a credit agreement. Down payment – paid by borrower which reduces that amount financed Foreclosure – the legal process by which the owner’s rights are terminated. Mortgage – a loan to finance the purchase of a house Preapproval – a written commitment from a lender that confirms the price of a home that a borrower can afford. Predatory Lending – when lenders conduct business in ways that is illegal or not the best interest of the borrower Principal – the money borrowed, not including interest and fees. Private Mortgage Insurance (PMI) – protects the lender and is usually required if you owe more that 80% of the mortgage. Terms To Know

Benefits of Home Ownership A place of your own Financial investment Cheaper than renting Tax benefits Financial stepping stone Benefits of Home Ownership

Realities of Home Ownership Ongoing costs Less easy to move Upkeep of home Increased value not guaranteed Possibility of foreclusure Realities of Home Ownership

Signs of a responsible lender Puts everything in writing Gives you time to shop An established company with a good reputation Signs of a responsible lender

Predatory lending warning signs Encouraged to include false information Ads promise “No Credit? No Problem” Incomplete loan documents Bi-weekly loan payments “Bait and Switch” Sales Tactics Predatory lending warning signs

Steps of Home Buying Process Make an offer Negotiate Go into contract Have a home inspection Get an appraisal Receive loan approval Finalize the sale Steps of Home Buying Process

Character Capacity Capital Collateral Conditions Five C’s of Credit

Reasons Loan is not granted Irregular employment Poor or lack of credit history Too short a time at residence Lack of income Insufficient down payment Reasons Loan is not granted